Retirement tax questions

You are confusing the basis in the Roth and the basis in a Traditional IRA.   Roth basis are your contributions to a Roth and are not tracked on a 8606.  You must keep track of  Roth basis yourself.   Once you are age 59 1/2 Roth basis no longer matters.

Your 2016  contribution that was switched to a Roth creates a basis in the Roth  and is not reported on a 8606.

2018 is not clear.   If you first made a Roth contribution and switched to a Traditional IRA in 2019 then in Jan of 2020 you would have received a 2019 1099-R reporting that.   

What code was in box 7?     

Regardless, if you took a deduction, then it would not create a basis in the Traditional IRA and not go on a 8606.

For 2019, did you report the $7K contribution as non-deductible on a 2019 8606 line 1?   Your 12/31/20 basis in the Traditional IRA would be $7K

For 2020,again if the $7K was also non-deductible reported on a 2020 8606 line 1 with the carry forward $7K basis on line 2 for the total basis of $14K on line 3.

The problem seems to be whether the 2018 contribution was actually recharactorized or not depending on what the box 7 code and how it was reported.

You cannot convert only the non-deductible basis.    Any Traditional IRA distribution is always a mix if before tax and after tax money.     So when you do the conversion it must know the year end value of ANY existing Traditional IRA accounts so the basis can be pro-rated over the distribution and total  year end value.  as in the example below:

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You can NEVER withdraw ONLY the nondeductible part - it must be prorated over the entire value of ALL Traditional IRA accounts which include SEP and SIMPLE IRA's. (For tax purposes you only have ONE Traditional IRA which can be split between as many different accounts as you want, but for tax purposes they are all added together).

For example using rough figures: if you had $60K of nondeductible contributions in an IRA with a total value of $600K (10:1 ratio), then when you take a $60K distribution from any IRA account $6,000 would be nontaxable and $54,000 would be taxable (same 10:1 ratio) , with the remaining $54K of basis staying in the IRA for future distributions. As long as there is any money in the IRA, there will be some basis.

TurboTax will ask for your non-deductible "basis" and then the *Total Value* of *all* Traditional IRA, SEP and SIMPLE accounts as of Dec 31, of the tax year. That is so the prorating of the basis can be properly proportioned between the current years distribution and the remaining IRA value. That is done on the 8606 form.